 Good afternoon. My name is Viktor Halberstadt. I am the chairman of this session on Eurasia on, actually, it's called Region in Transformation with a very distinguished panel, a very competent panel. President of Azerbaijan, Minister of Kazakhstan, former President of the European Commission, President of the EBRD and one of the great private sector players in the region, Mr. Deripaska. This is a session which is on the record and we will have an opportunity for Q&A in the, I would call the third half of the session, but we will initially have a introductory remarks by President Aliyev, your comments and then we have initial comments from each of the panelists, then we'll go for Q&A. So, President Aliyev, floor is yours. Thank you very much. Of course, talking about transformation in the region, as far as Azerbaijan is concerned, we should start from the very beginning when we became independent back in 1991. That was a major transformation for the region and also a biggest challenge for us because we got an opportunity to build an independent state and we had to build a state at the same time to build a modern economy based on market economy principles. So the transformation for us was a transformation of political system because before independence we didn't have any and transformation from planned economy to market economy and I think that these 23 years of independence are remarkable from point of view of what a country can achieve if it has a policy of open doors, attracts investments and addresses the main challenges of today. So from economic point of view, Azerbaijan's economy now is 85 percent as a private sector. Also the policy of diversification of economy is successfully implemented. We are more and more free from the pressure of the oil prices. So the biggest part of our economy is generated in the non-energy sector. At the same time, a lot has been done in implementing the major infrastructure projects with the assistance of international financial institutions, particularly EBRD and others. And now Azerbaijan already became a donor country so we are already ourselves financed several projects through IFC and other international financial instruments. Of course energy security for us in the beginning was a means to develop because that was the main energy resources we had. Now our energy resources play a role in the region and just recently we launched a new major mega project which is called Southern Gas Corridor to transport gas from Azerbaijan to Europe which will be probably one of the biggest infrastructure projects of Europe. And Southern Gas Corridor is already a project which is being implemented. Diversification of economy is one of the important elements for every country especially rich with oil and gas. And here I think we also can talk about some success. But of course a lot is to be done in the future because we are living in the region which is transforming not only from negative to positive but unfortunately we have some deterioration in the region. We have more and more conflicts, more and more threats including threats of terroristic attacks. And of course stability inside the country can be provided fully when you have more or less predictable situation beyond your borders. Therefore our energy and transportation projects are aimed at a broad international or regional cooperation so that every country can benefit. And I think that the policy which our government is pursuing is that everybody should take advantage of our opportunities, producers, transitors, consumers. So it's a kind of a teamwork which Azerbaijan managed to create and today the region where we are situated is more stable than ever before but beyond our borders of the region situation is changing. So the new challenges of course the drop of the oil price is a challenge for our economy. But I think we always need to find positive moments even if something negative is happening. So it will mobilize us to be more efficient, to spend less and to learn to live with low oil prices. That will be very useful for us when our resources will come to an end. Probably I will conclude now in order to be on the track. Thank you for being so disciplined and I'm sure it's a great model and a great example for the other panelists. But could you elaborate perhaps for a few more minutes on the geopolitical constraints which you were implicitly referring to? Well for us of course the main challenge is conflict resolution because we are suffering from the occupation by Armenia for more than 20 years. And for more than 20 years the negotiation process does not lead to any result. And I think that all the conflicts in the post-Soviet area and in general in the world must be treated from the same angle, the same approach and the same international law norms must be applied. When one conflict is not resolved or is protracted then it leads the way to other conflicts. Therefore what we see now in the post-Soviet area is very disappointing. And not only we see tensions in the Middle East, we see since I've been here last time a lot has been changed. We have new threats which we could not even imagine that we will have. And these threats are no longer regional threats, they're global threats. And we see these terrible attacks in Europe which were generated by destabilization and maybe by not addressing on the right time the issues which seemed to be local or regional. Of course our conflict between Armenia and Azerbaijan is a regional conflict but it has an impact on a broader scale from point of view of geography and from point of view of methodology. If you don't address and resolve this conflict based on international law then you must be ready to see the similar things in other parts of the world. And also important is that international law norms should not be interpreted by different countries with respect to their interests. They must be interpreted as they've been written and it's a very clear definition in United Nations Charter in documents of OEC and other international organizations about priorities of the principles of international law. So all of them must be observed. Then we will avoid double standards and more important we will avoid or maybe reduce the risks of new conflicts in our region. Thank you. Minister you are in charge of integration and trade for Kazakhstan. Play a crucial role in this context which has been painted by the President. Could you comment on where you see the threats not only the opportunities? First I'll start with opportunities. I think that in any challenges be that a global challenge or regional challenge one should look for the best ways of addressing these challenges and the way how Kazakhstan is approaching in addressing these challenges is openness, openness of its economy as well as openness of its political system for political cooperation with the neighboring countries in the region as well as globally. So I just would like to start having here President Baroza that last year in the Davos meeting my President met with President Baroza and they agreed that they will be by the end of 2014 concluding Kazakhstan and the European Union will be concluding enhanced partnership and cooperation framework agreement. European Union, 28 member states of the European Union are our largest trading partner. More than 50% of our trade takes place with EU member states and more than half of our foreign direct investments which exceed $200 billion since we gained independence has been attracted from European Union member states. So I just would like to state, I am pleased to state that I arrived from Brussels yesterday where we initialed this document enhanced partnership and cooperation framework with European Union which will be leading to more to better investment climate and as well as to increasing trade with European countries. As you know also Kazakhstan is participating in the customs union with our regional neighbors Russia and Belarus and which has been transformed as of 1st January 2015 into the Eurasian Economic Union where we have freedom of movement of goods, freedom of movement of labour and capital between these three countries and all these efforts regional and global integration efforts are being undertaken with the sole purpose of diversification of Kazakhstan's economy and creating better favorable investment climate for investments into non-mining, non-extracting and non-oil and gas sectors because Kazakhstan was successful in attracting investments into oil and gas sectors as well as Azerbaijan and the major challenge as President Alev has mentioned is the diversification of the national economy and the creation of better investment climate. So this is the approach, this is the position of Kazakhstan in addressing the regional challenges which we do have in the region and we have a strong relationship with all former Soviet republics. We have a CIS free trade agreement and we are committed to maintaining this free trade and further enhancing our free trade and strong economic operation with neighboring countries in the region. Thank you. So let me follow up on that encouraging statement but the geopolitical threats which were briefly described by the President, do you see them similarly? Of course geopolitical threats which are happening in the region, they have implications in the form of decreased reduced oil price, sharp decline in oil price and as well as hesitance on the part of foreign direct investors and this type of implications we are facing but we can't say that we are being directly affected by the geopolitical threats or regional threats but of course our relationship and our cooperation with these countries are being reduced or being negatively affected and we are working with these governments in order to address them. Thank you. Mr. Shariabata, you have been involved heavily and EBRD is in the region, can you give us a quick overview of what you see as the facts and the threats and opportunities? Okay, well maybe I'd like to start really where President Aliyev started because I think it's quite important history lesson really to remember in 1991 these were new countries, many of these countries and what has happened I think in the last nearly a quarter of century now has been quite extraordinary and people tend to forget that, people tend to sort of look at just the last six months, last year and focus on that but actually there's been enormous progress and I think the biggest issue now is how to maintain that progress. Of course in the first decade after 1991 there was a lot of reform, a lot of what we call the low hanging fruit type reform was done and highly necessary but we in EBRD as you probably saw in this famous stuck-in transition report back in 2013 we said basically the region not just Eurasia but also Eastern Europe as well had got a lot of stuck, transition reforms are not progressing because they were much more difficult, they really required the taking on a vested interest and actually that was much more difficult for any politician in any country, not just in Eurasia. So I'm very pleased actually because I think in what's happened in the last 12 months and particularly in these two countries is a signal of actually reform again being regenerated in some of these countries. We need more of it of course but I think that's been very good. I'd say the key areas and I'm very interested in here with Oleg says as well as a businessman but from where we sit as an institution that does a lot of project finance and tries to push reform, transition reform, I think there are three or four areas really. One would be that there's less cross-border capital flow frankly into this region than there should be and that's partly because a lot of country, a lot of institutions don't know the region very well actually. There's a lack of knowledge and information by the region is quite extraordinary quite often. I think also the tighter regulations have made it much harder actually for an unknown region globally at least to attract money. So that means the Eurasian countries have to work twice as hard I often feel to attract finance. That's very, very important. Outside of the natural resources sector of course that's well known. Secondly I think what do business men look for? They look for stable and predictable business environments. They want as liberal a climate as they can get but they're really looking for a stable and consistent climate. I think that's important. They won't look for a functioning, well-functioning judiciary particularly the commercial courts need to function well. Procurement processes those are things that businesses would look for and I think that's very important. That's a challenge that we're trying to work on together. Another area would be sort of the resilience area. What we said in that famous report in 2013 was to attract investment to get a cross-border trade going. One needs very strong and sound political and economic institutions. Good governance by old language if you like and I think that goes beyond just the usual institutions of an independent central bank, good functioning ministry of finance of course we need all those things too but we also need to build up local capital markets, local sources of finance too to help the economies be resilient in times when it's difficult to attract foreign investment particularly. I think that's very, very important and I know in both countries that I've certainly discussed it with the president. I've discussed it with the president Nazarbayev, the importance of transparency really seriously fighting corruption wherever one sees it and that's an important issue to bring out I think as well. The last point I think I ought to make is really about connectivity as I would put it. I think it's great that in these two countries we have leaderships which are trying to connect with international institutions not just mine many others. I think this is very important is the exchange of ideas, the setting of standards, the regulatory frameworks. This is how this gets done. I think it's extremely important. The thing that still concerns me particularly in Central Asia is the I suppose less than optimal, suboptimal connectivity between the countries. The number of times when I go to the region and I hear about problems at the border, customs issues and so on, this is impeding trade, making it difficult for businessmen I think and business women to really do the business. So I think a lot more work needs to be done within the region to try and break down some of the boundaries. Sometimes it is about conflict issues which of course you raise. I think we can't deny that. However, there are conflicts in the region. I would say on the whole one of the marketing devices that this region hasn't used enough of in my view is that it is actually more of an oasis of stability and peace certainly Central Asia than some other parts of the world and that's what I tend to say to foreign investors. So I'm going to India in two weeks time. What will I be saying to them come to Central Asia particularly because actually you have a much more stable environment there as well politically. Thank you. Mr. Erpazka, you represent the private sector in this conversation and you are very active in the region. So I know you are very enthusiastic about the opportunities but tell us about the issues which you think need to be addressed. There is a lot of opportunities but it's tough time in front of us. The commodities slump is not just the rest of commodities and of course my driver of our region in the past was resources. But anyway, I think we just need to be prepared for next cycle. The cycle wouldn't take long. I would really focus on infrastructure. Because infrastructure is really what's united Eurasia. Whatever program would be Shanghai cooperation, one Europe from Lisbon to Vladivostok. We never talk about India but India is Eurasian country and we have technology now to connect India by railway, by roads and on the way it will help us to resolve a lot of issues with security and I think logistic transport infrastructure, communication is the key and no one could do it alone. Yes, Soviet Union was strong enough. It's developed a lot of infrastructure, a lot of benefits we inherited. China, very focused. But China focused on China centric. All pipelines goes in China. All in ways, even if silk roads, it helps a lot for all of us. I think somehow governments, bodies, mass design, and it's much more, should be much more tougher institutions than just sink tank. It should be planning agency. And we've all been about planning economy for quite a long time and it was a good benefit from this planning economy. Especially for infrastructure. You can't miss. If you miss and if you don't understand what's the flow of the cargo, then your port wouldn't be utilised and you invest a lot. A lot of projects started in silk roads I mentioned. Russia developed Trans-Siberian roads. We started this togetherisation partner, this Polo Way, which is safe in almost 12 days if you travel. Airplanes, not just east to west, west to east, but also cross Polo traffic. But all this infrastructure must be supported from the state. We can do a lot, but if it would be states, not just one state, states commitment and it would be proper dedication of resources. I think it's a key issue. We already benefit a lot from communication infrastructure. It's really one digital platform now in Asia. We have this developed, but infrastructure will demand more resources. And our countries unfortunately will have this lump because of commodity price collapse. And it's not for one year, two years. It would be much longer for many reasons. But infrastructure must be still on focus. Same. British, when they build the empire and use the revolution, they secure their traffic through the sea. America, when they try to develop, they build this railway roads and then they use airplanes. And Eurasia has no option. We need to build common infrastructure and this should be well thought and prepared in advance and should be proper planning agency for this. Would it make a difference if the Eurasian Economic Union would take off as an institution? We'll be very weak, to be honest. Russia would be very weak and it's not our cycle. But we could not postpone development for next seven years. When you wake up and oil will be back $120, oil would need more iron ore, coal, all these resources. It would be very expensive. If we talk about growth, we need to talk about sustainable growth. And you need to think about infrastructure now, not in 25 years. And Eurasia is the most populated continent. We don't know how far we can go. And the more security we'll bring, the more prosperity, more stability, more kids and infrastructure important issue. If you don't put this, even now it would be much more cheaper. Even now things, you know, ambitions would be lower because of low oil price. It would be more easy to negotiate between the countries and it's bring security. Thank you. President Barroso, you've been in the many dossiers you've been dealing with in the past decade. You've been very busy with this one, too. It was already referred to by the minister. So how do you compare this now to, say, five years ago when you and I, I believe, first spoke about this? First of all, thank you very much for your invitation. In fact, we have made a priority this region, Eurasian region. And specifically these two countries represented here by President Aliyev and those of the Prime Minister Aydzenov, so Azerbaijan and Kazakhstan. We are in the European Union. It's by a large difference, the biggest economic partner. That's very important. And trade and investment, by a huge difference. With other very important players that are neighbors. Of course, Russia is a very important player. Come second. China, even to a less extent, is present, but it's increasing precisely. This Silk Road project is a project that China gives the highest importance. So I believe it's critically important for Europe. The development of this region. So Eurasia is key for Europe's stability and security. That's why we have been supporting all the moves for diversification of energy supplies. I had the honor in January 2011 to sign with President Aliyev precise declaration that created this possibility of this Salson corridor. And I was so proud that, in fact, one of the last moments of my presidency was receiving President Nazarbayev in Brussels to give the final political agreement on this cooperation, an enhanced partnership and cooperation agreement. So it's critically important for Europe for these reasons not only for energy, but energy is certainly a part. And because it is a strategic link between Europe and Asia. And because also, if we don't solve some of these conflicts that are in the region and now I'm going to be less diplomatic than those who are in office, now I'm free for public office. There are real problems there. We have not mentioned, but these two countries are countries that are predominantly Muslim, but they are secular countries. And but these ISIS, they have made one of their goals is to establish a caliphate in Central Asia. It's critically important the success of these countries to establish themselves as a barrier against all forms of Muslim fundamentalism and terrorism. This is a major geopolitical threat that we have for Europe. And now Europe, I'm speaking in general, including Russia, by the way, the major, major threat. But also, let's be honest about this, not everything that has been developing last year in the so-called post-Soviet space has been in the right direction. And one of the major challenges here is to support the consolidation of the dependence and sovereignty of these countries. And that they have said, these are very relatively young countries. So the first task they had was to consolidate as states. And what they have done is impressive, as our friend, the president of the EBI, did just said. They are not only consolidated their independence, their statehood, but in terms of economic development, it's great. Now the challenge for those countries, as I see it, I'm giving, of course, an outside perspective, correct me if I'm wrong. As I see it, now the task is the reforms, the modernization of the countries, both economically and politically, at the same time that this sovereignty, this statehood is consolidated. That's why, for instance, we are very supportive of the European Union. I'm still speaking, even if I'm no longer in the official capacity, but that's what I think, supportive of all these moves, for instance, to join WTO. Just now we were present in a commemoration of a signature of a program between the Kazakhstan and the OECD. So everything that can help to reform stabilization in the long run and stability of those countries, because there are, indeed, geopolitical challenges where the position occupied by Kazakhstan and by Azerbaijan can be crucial. Namely, the stability or lack of stability in the relationship in Eastern Europe, the relationship with the post-Soviet space is key. And also, of course, the threat of all forms of terrorism, including this. I mean, I don't like to use the word Muslim, but I'm sorry, they say they are Muslim. The Muslim fundamentalist terrorist threat that we have seen recently, also with this very important impact in Europe. So I personally believe that this problem, the fall of the prices of oil, can really be. I know it's a common place to say it's an opportunity, but I really believe it can be. It's a blessing for you. Your country has now the possibility to diversify. As President Donald, you have said to be not to become lazy. To use the resources that you have and you have considerable impressive resources to diversify in all sectors because we know that constraints are the greatest trigger for reform. And so I believe now the speed of reform in your countries in diversification is going to be bigger. But the other point I want to fully concur with our friend from DBRD. The integration in the region is not sufficient within the region itself. And I'm not speaking not only of these two countries. For instance, Tajikistan, Uzbekistan, there are problems, there are problems with water. We know that sometimes there are difficult problems. Of course we have the problems not solved like the Nagorno-Karabakh issue. But the integration in the region is not sufficient. We in the European Union, by definition, we support regional integration. And that's an important debate, but that should be another panel probably. Why can't we do it with the Eurasian Union? Because for us, we want to do it. At least I want to tell you, my leadership in the commission, and I'm sure the new one as well, wants in the Eurasian Union to be stable and to have a good relationship. The fact that we have finalized an agreement with Kazakhstan, being Kazakhstan a member of the customs union is a good expression of that. But that's a very important thing. We believe in open regionalism. When you create a new union, a regional union, it is not too close to others, on the contrary. It's not to raise new obstacles. To trade is to lower tariffs, is to reduce non-tariff barriers. And this is the important question. It seems a new answer, but it's very important. Can we, one day, have this dream? I spoke several times with President Putin about that. From Lisbon to Vladivostok. Can it happen? I believe it can happen. But it is not creating opposing unions, original unions. It is creating, if necessary, unions or subunions, but they are open to the others and that they are able to establish a good, deep-independent relation. So what is going to happen in these two countries next year? It's critically important, I believe, for stability, not only in Europe, in the broader Eurasian region, including Russia, and also in the relations with other important players that we have not mentioned all of them, like Iran. An important player also, close to this region, and also someone mentioned also India. So how can we be sure that this region is not becoming a real problem for the world? On the contrary, it can be a good example for prosperity, stability, and of course justice in the region and in the world. President, when we started this conversation, I think two and a half years ago in Baku, when you and I were the only ones in this group who were involved at that, what has changed? I mean, obviously there is a much greater acceptance of the great opportunities, but the threats which Jose Manuel Barroso was referring to have come on stage. So how do you perceive that for the success of what you're trying to achieve? Yes, exactly. I fully agree with what President Barroso said in his remarks, very knowledgeable as a result of his great experience and knowledge. And also he knows very well the region and really understands the challenges of the region. And what countries like Azerbaijan, Kazakhstan and our neighbors want to see for the future, all of us, we want to have stable, peaceful development in our countries so people live better, have good access to decent services, to be more protected, to live in a safe situation. And those threats which today became very obvious, these potential threats always existed. It was just a matter of how countries addressed these potential threats. What do they do in order to prevent it? Because when the threat is obvious and already attacks you, it's already late. You need to work hard in order to create such an atmosphere in the society, first of all in your own country, so that the grounds for these threats would be minimum. And that is mainly economic development, reduction of unemployment, poverty, good governance and social justice. So these were the key elements which for us was always a main priority. And when we started economic reforms and it was not easy because as I said before, we had to change the system completely when we were in a very poor situation. At that time we didn't have oil and gas development and the poverty was endemic. So changing this economic system created a lot of social tensions. So therefore for us social policy, economic policy always was going in parallel because radical economic reforms lead to sometimes social problems. And the threats which today became obvious like terrorist threats, like what is happening in the Middle East, that's mainly because of lack of education. So we invested a lot in education. And one of my first public addresses was as a president 10 years ago, I said we need to transform black gold into human capital. In other words, to use advantages of energy resources to invest in education, invest in modern technologies, invest in services. And that's why today Azerbaijan is a country with space industry. We are proud to have now two satellites. We have 100% literacy and you have now a middle class which generates wealth regardless of the oil price. Radicalism is of course a threat to all of us. And as President Barroso correctly mentioned, geopolitical location of our countries is a natural barrier for radicals to penetrate to European continent. In other words, security and stability in Azerbaijan and Kazakhstan is not only for our countries but for neighborhood. And importance of our countries for Europe is not only measured by oil and gas as somebody usually thinks. So it's very important and maybe more than ever before. But also it's a good example of secular, modern Muslim countries. And it shows that it is possible in a Muslim country to have modern society, secular society with all respect to all the traditional religions to build a society which is based on common values. And our initiatives which were also supported by European commission to become closer to EU mainly has this agenda. I remember at one of the press conferences with President Barroso I said we want to be as close to European Union as possible and I want to repeat it. And for us it's not only access to market and technology but also it's kind of a guarantee that our modern secular development will continue. So at the same time it's also very important making assessment about our region of course about the history. Our countries were not independent for centuries. And this is a kind of a psychological background. Therefore independence, how majority of population understand it is always accompanied by national dignity. So now we are free, now we have our own flag. We are members of United Nations. Now we show that we can live ourselves and we want to do it ourselves. Sometimes it creates certain movements when we are addressing the issues which are mainly referring to political development and political reforms but we are committed to do it. And as President Barroso said political reforms are very important because without that no country can have a sustainable development. We want to have the same situation and system in Azerbaijan as in the developed countries of the world. And if you look at the developed countries of the world you will see that none of them has oil or gas and those who have oil and gas sometimes do not have the full benefits of these resources. So oil and gas is just a means for development. And of course issues like security and we are playing a role for instance on security in the region of Afghanistan. Mr. Teripaska was referring to infrastructure. We are building the railroad connection between the regions so-called Bakut-Bilisi-Kars Railroad which will connect the continents. Everybody will benefit. Russia, China, Kazakhstan, Azerbaijan, Turkey, Georgia, Europe. And this is a win-win project. So we need to do more projects like that. But the only thing is the agenda of the governments with the low oil price the governments which used to have a lot of cash how they will plan their budget. I agree we need to invest more into infrastructure but with this oil price we invest more in infrastructure our reserves go down and we need to find the proper balance because the reserves they create confidence not only inside the country but for investors. When we are reducing our reserves for the sake of major infrastructure that could have also some negative impact. So the right balance must be found. Thank you President. Now I think we should now turn to the audience. We have like 15 minutes for very brief questions and comments but I underline briefly and those who want to speak please identify yourself. Who has a question? You must have been extraordinarily convincing all five of you. From all the people I know in the room the last thing I had expected that would all be mum. That's intriguing. So let's go back to that. There is one. Yes sir. Thank you very much. Speaking of Piszarski, I'm chairman of the Bulaski Foundation from Poland. My question is how the relation between Russia and Ukraine influences the relation between Russia and former Soviet states. Just the current state of situation and development. Thank you very much. So I should probably first ask Mr. Derya Poska. There is development, recent development of course. It's a tragedy. You have to understand that 40% of Russian has relatives in Ukraine. 17%, 70% of Ukrainian has relatives in Russia. It wouldn't take long. There is a different reason why it started, why it was developed. It was not well thought through for the last two years. From the any side. There would be more casualties. There would be definitely a fight for another three or four months. As I said, it's a tragedy. By sufferings we'll come with them. What would happen? I believe that there is more opportunity to restore trust. I believe that if we work together it was the right point. Yes, we will have less opportunity to invest ourselves. But we will give opportunity to our European partners, partners in China to use cheap resources. They need things through for quite a longer term. And they need energy. Energy resources. And if energy will not be used efficiently like we see in China, then pollution will damage the rest of the world. That's why we need to not join forces. Infrastructure is the first step. And what's happened between our two brothers countries? As I said, it's a tragedy and we just need to live through it and wait three, four years to heal it. Do you see light at the end of that road? Of course, there is no chance. There was no Slavic war which bring any pride to anyone for the last thousand years. Right. Ten seconds of silence. President, I'm hearing Mr. Derey Poska. So what is the impact of the Russia-Ukraine development? From a practical point of view, in Azerbaijan, nobody feels any impact on that. I want to be very open and frank. So it does not impact on us on the day-to-day format. But of course, from a political point of view, for any country which has good friendly relations with Russia and Ukraine, it's not a situation which is preferable. And of course, we share the pain of the people who lost their relatives and its tragedy unfortunately continues. Innocent people are being killed from both sides. And of course, as soon as this comes to an end, the better. We as a country which suffered from war and occupation, we understand it and every war ends with ceasefire and then preferably the peace agreement must be signed. And also I think important is how the governments of Russia and Ukraine treat their partners and what is the level of understanding in the governments of these countries to the position of their partners. Because we are all members of community of independent states. We are all members of Soviet Union. We have a lot of connections. Of course, not as Russians as Ukrainians, but we also have relatives in Russia. In Ukraine, we have maybe more than one million Azerbaijanis living in Russia and more than 500,000 in Ukraine. And they are, for instance, on both sides. And it's like a civil confrontation. But what I'm saying is that, and I think there is understanding because Azerbaijan's position on territorial integrity is very clear and straightforward. And no one can expect any other position from Azerbaijan having in mind international law norms and our situation with Armenia. And I'm glad that the Russian government and the leadership understands that this position which Azerbaijan has and they respect this position. And we discussed it on the high level with my colleagues in Russia. The same, I hope, with the situation with Ukrainian government. We didn't have a chance to have a contact. But I think they also should understand that for us Russia is a good friend, a good partner, reliable partner, a big neighbor. We have a lot of contacts. We have a lot of trade, mutual interests. And the way how relations between Russia and Azerbaijan develop is a good indicator on how relations between, you know, big country and small country being neighbors can be managed. And I think a very good indicator. So it depends mainly on the understanding in both capitals in Moscow and Kiev that countries like Azerbaijan, Kazakhstan and some others of the neighborhood, they have their own agenda, their own position. They don't want to damage relations with neither of them. And they want sincerely the soonest resolution of this conflict because of victims, first of all, because of tragedy and because this situation is not comfortable. You know, we want to be in a comfortable situation dealing with our two friends. So I hope, as Mr. Derebaskar says, soon we will have ceasefire as a first step and then agreements. Well, I think my two colleagues have summed it up. The word tragedy is about the right word, I think. It's an economic and social tragedy that's going on here. I think if you look at just Ukraine and Russia alone, it's a tragedy. But if you look at the neighboring region, the collateral damage is enormous, actually. We've just published our new forecast this week, economic forecast for these countries. We're predicting that both Russia and Ukraine will both contract by 5% of GDP this year. It's a huge contraction in both. If you look at even Central Asia, and I'm not including Azerbaijan in these numbers, the average is going to go down from 6.6 to 3.6%. It's not nowhere near the economic potential growth rate of these countries. And that is because of the damage, because the Russian economy is such a powerful motor for the region, remittances, export markets and so on. It's having enormous damage. So, like Oleg, like President Aliyev, I of course hope that leaderships will come to their senses, be able to talk and find a way through this. But it is really, really seriously awful. And in the case of Ukraine, I think they're on the brink here of an economic catastrophe unless a huge reform programme is enacted, unless there's a huge IMF-led package as well. And we can get good business to come back into Ukraine and invest again. And of course we're trying to do our bit there, but it's a bit difficult. It does, though, I think with oil as well on top of that, not just sanctions with oil on top of that at $50 a barrel, it does push, I think, countries to really push for diversification. We keep talking about diversification. Another EBRD study back in 2012 showed that Russia was less diversified now, is less diversified now than it was in Soviet times, both in sectoral terms but also in regional-spatial terms as well. So there's something to be said for central planning. That's an extraordinary outcome. Who would have thought as Russia became more of an open-market economy that would happen. But a lot of policy changes would have been delayed because oil was at such a high price. So if there's one thing we should do now we should really take diversification seriously. And here, again, both Azerbaijan and Kazakhstan have started implementing policies. I think the non-oil and gas sector has actually taken a larger share of GDP in both countries. That's good. But a lot more change in that direction is required to make them more resilient. Thank you. Ricardo Hausmann back. Thank you. Continuing on the question indirectly of Ukraine, Russia has moved on the agenda of the Eurasian Common Market to which Kazakhstan has joined together with Belarus. Obviously, the implications of Russia confronting the West means that the ruble took a hit, commercial sanctions were put in. That complicates the relationship for Kazakhstan. So I have like two questions. First, is the value of the Eurasian Common Market lower for Kazakhstan because of Russian confrontation with Europe? And a question for Russia, is confrontation with Europe a negative for its ability to recreate the Eurasian Common Market because it's less attractive to join a country that has very unstable financial and trade relations with the rest of the world? Thank you. Maybe... Yes, the question about Kazakhstan. Kazakhstan is a landlocked country. And as I mentioned, our largest trading partner for our exports, as well as for imports for trade is European Union followed by Russia, China, and other countries. So Ukraine is the second largest partner, economic partner for Kazakhstan in the CIS region. And for Kazakhstan, always the issue of access to Russian transportation and transit infrastructure was an issue of utmost importance for our sustainable economic growth, for sustaining our trade in the global arena. We have a border with China. Of course, China is our third largest trading partner and it's becoming one of the major investors in Kazakhstan's economy. And we have a lot of projects now being discussed. But, you know, say for Eurasian Economic Union, it's a decision made by the establishment of Kazakhstan based on very pragmatic reasons. We need to have a smooth access for both transit for imports and exports to Russian transportation infrastructure. And this is one of the major components of the Eurasian Economic Union Agreement, which has started its enactment as of 1 January 2015. And therefore, to say that because of... Of course, you know, with the currency devaluation in Russia, most of the Kazakhstanian consumers are now benefiting from cheap prices or for apartments, for real estate, for automobiles and for food products. Of course, it's a challenge for our producers now. And we are also adjusting our economic policies, taking into account these implications. But we believe that these are temporary implications of the current events which are taking place in the Russian economy. And we are not being affected by embargo directly because, as I have mentioned, we have a strong relationship globally with our major key trading partners. And we are working closely with Russia in order to make sure that Ukrainian goods are transited through Russia to Kazakhstan without any interruptions. And with Ukraine, we have a strong, both political and economic relationship in which we hope and we are working hard will not be affected by the current circumstances and by the current situation. So Russia is our strategic partner. It's our neighbor. And we used to be... More than 40% of the population of Kazakhstan are Russian-speaking. And we are part of the same cultural, common space or framework. So, therefore, I think that, you know, there are, of course, temporary economic effects on certain groups of producers or on certain economic entities. But in the long run and in general, I don't think that the value, how you have mentioned, Professor Hausmann, was my professor at Harvard University. And it's not affecting... It's not going to be devalued by the current situation. Thank you. Mr. Derya Paska, can you... I know you do not represent the Russian government. But can you very briefly react to Professor Hausmann's question? Yeah, but I can answer from other Russia. But I will not hesitate to forward my... First of all, the Eurasian Union was, you know, President Nazarbayev's idea. And I think it was very, you know, thoughtful and right idea. And President Nazarbayev has very clear view of how Eurasia should be developed, transformed, and I think it's very important. And it's a mutual benefit for, you know, for many reasons, not just transportation, logistics, you know, but it's common market. And for reform, we need to adjust culture. First reform, you know, would be successful. Second. And yes, there is a challenge. Russia will suffer, you know. Unfortunately, it will have no consequence. But in two, three years, I think, we will make a proper, you know, outcome out of this, what's happened. And we can, you know, go for this. It's the only hope. And, you know, we suffer a lot, you know, for the last 300 years, but always, you know, slowly come back. Five minutes left. So one minute for you in the back, and I believe there's somebody behind me. That's another 30 seconds. And then everyone at the panel, I apologize. Thank you. I'll be very, very quickly. A question for China. I'm wondering if any panelists want to comment on the reviving Silk Road project or reviving Silk Road strategy. To what extent and in what way can this strategy contribute to the region? Thank you, sir. You have the microphone? Yes. Okay. The question is if you think that the situation with oil prices will push the countries to enter financing alternative energy resources into financing this year. That's it. All right. Thank you. Thank you. I'll go back to the panel. I'll start with you, Jose Manuel. Yeah. I think about this concrete question. It's better that the representatives of the countries say what they think. I just want to make a general comment if I may following all the very instinctive discussion, and I thank you all for the comments. Is this about Eurasian Union and European Union? Because that's a very sensitive issue. It's true that this tragedy, and the word was commonly used of the Ukrainian crisis, is now a major obstacle for good confidence relations between Europe and Russia, and this as having a profound impact. So it may affect also the overall relation. But I also believe that establishing a proper relationship between the Eurasian Union and the European Union could be a way out of the solution for the Ukrainian issue. It's one of the scenarios that at least I was studying when I was still commissioned present. So trying to find the solution, not just in terms of the conflict Ukraine, Russia, but what could be the good relationship between Eurasian Union and European Union with one principle that is very important. That's why I made this remark in my introductory remark, the respect of the sovereignty of all the members of the different Union. This is the question, because if not, then we have a problem. So we have to, but if you accept, like in the European Union, that countries are free to be members or free to leave, that we should accept the same principle in the other Union, and of course that each country there should respect, of course, the borders and the stability of the others. And this is part, because one point I just want to clarify and I finish, European research did not impose any kind of partnership to any country. For instance, Armenia decided, we know why, decided not to make the agreement cooperation with the European Union, and the European Union accepted it perfectly well. But Ukraine wanted to have an agreement with the European Union and we accepted that. So this is the important principle, the respect of the sovereignty of all the members. If this principle is accepted, I think it's probably too idealistic now, but I believe it's feasible to work the future between Ukraine, Russia and European Union for a solution of the Ukrainian issue of having in mind the four longer term perspective for this cooperation. Thank you. And apologies for trying to direct you. Well, just quickly on the two questions. Very brief. Yeah, reviving Silk Road, yes, it is absolutely part of rejuvenation of this whole region. It goes to a next point about infrastructure fundamentally, but it also goes to investments by China in many of these countries. And I think that's very, very important. Secondly, on alternative energy sources, yes, there is a push now on renewables, but we're in the foothills, frankly, of thinking about renewables in this region. So we've just had our first major wind farm project in Kazakhstan, whereas we've been doing so many of these in other countries already. So we now need to do a lot more of that. Thank you. Mr. Paskar, any closing? Renewables would be under pressure, but we need to improve environment and, again, infrastructure. You can put renewables without proper greed into connection because renewables are very vulnerable in a day or season. And you need to have proper power greed which should connect in a whole duration and proper capacity meant because this will bring a lot of efficiency. And Silk Road, it's a very important project. And the faster Silk Road will go, the more understanding how it's to plan in a cross-country infrastructure and how it will cost and what sort of benefits. It's a very interesting project. It must be supported. Thank you. Brief comment from you. On Silk Road, I would like to mention that Kazakhstan has launched a mega road transportation project which is called Western China Eastern Europe. And it's a project which is financed both by Kazakhstan's government as well as Russian government on its territory and Chinese government on the Chinese part. This project is called to or is aimed at boosting trade not only between Europe and China but also in the broad Eurasian region and within Central Asian region too. And we are also working on building the infrastructure for the special economic zone. Horgos on the border with China. And as I have mentioned, China is becoming gradually one of the major investors not only into the oil energy sector of Kazakhstan but also contributing to diversification of Kazakhstan's growth. Yesterday, my prime minister has discussed with Chinese prime minister at the meeting projects for which will be outside extracting sectors and in services sectors. And we are discussing the projects for almost like 20 billion US dollars joint ventures between Chinese and Kazakhstan's companies. And regarding the renewables, using this opportunity, I just would like to invite all your governments and representatives to the Expo 2017 which will take place in Astana. And the theme of the Expo is new energy and where Kazakhstan is particularly, I think it is important in current global prices, volatile price situation for our exports of crude oil and other energy resources. We are now looking at alternative energy sources and development of this segment as one of the ways for ensuring sustainable economic growth. Thank you. Thank you, minister. Final minute for you, president. Of course, I support renewables and we do projects on that. Of course, Silk Road is for us a strategic importance, but I would like maybe to draw attention to what Mr. Baroso said about the respect to the choices. And this is the most important, especially for the countries which had the history, not an easy one. And as we discussed prior, independence of Kazakhstan, Azerbaijan and our partners is only less for 25 years. And therefore for us being able to make a choice and to analyze the situation is very important. And any kind of integration is just a reflection of your agenda. You integrate because you want to have more protection or you want to have more economic advantages or you have to have more bilateral, trilateral cooperation. Therefore, the way how European Union treats its program of association, eastern partnership, I think it's a very good example. It gives you the choice, it gives you criteria and it gives you opportunity and you choose. You want to be here or you want to be there or you don't want to be anywhere. And then you discuss it in your country and make a right choice. So I think this is the best example how to integrate because you cannot integrate by force. We already had it. And our nations know what is to be integrated by force and to vote for 100%. So this form of cooperation I think is the best. And as I said, I want to repeat with European Union we want to be as close as European Union can afford us to be close. Thank you very much for a very rich and candid conversation which could have lasted much longer. Thank you.